Pennsylvania Sales and Use Tax
Does your business have a connection to Pennsylvania?
It may not be obvious but even the slightest tie could have adverse tax consequences. That connection, referred to as “nexus,” may be sufficient to subject the business to sales tax.
Pennsylvania imposes sales taxes on the sale of certain tangible personal property or services. If you are a vendor in Pennsylvania, you are required to collect the tax and remit it on each sale at retail.
So how does Pennsylvania define a vendor that has a place of business within the state?
Pennsylvania defines business nexus in various ways. For example, a vendor might consider the following definition:
“Having any contact within this Commonwealth (Pennsylvania) which would allow the Commonwealth to require a person to collect and remit tax under the Constitution of the United States” A vendor may still be taxable even if it has no employees in the state.
In a recent Tax Bulletin, Pennsylvania provided insight into how it defines the business connection. Here are a few examples of a business connection:
A remote seller stores property or the property of a representative at a distribution or fulfillment center located within the Commonwealth.
A remote seller who has a contractual relationship with an entity or individual physically located in Pennsylvania whose website has a link that encourages purchasers to place orders with the remote sellers.
A remote seller who regularly solicits orders from Pennsylvania customers via the website of an entity or individual physically located in Pennsylvania.
A vendor should investigate whether its website activities subject it to the Pennsylvania Sales and Use Statute.
Pennsylvania provides that remote sellers with a physical presence in the state must be licensed and begin collecting sales tax. That includes sellers with a subsidiary, representative or an agent in Pennsylvania.
Vendors that lease, sell or deliver tangible personal property within Pennsylvania must be aware that they may be required to remit sales tax.
Pennsylvania intends to undertake enforcement actions against any seller deemed non-compliant with the statute.
If you would like more information about Pennsylvania Elder Law, Business Law or Tax Law, please contact an experienced Pennsylvania Attorney who is also a Certified Public Accountant (CPA) via email or phone us at (724) 216.6551 at our Greensburg, Pennsylvania office.
The Iezzi Law Office serves clients in southwestern Pennsylvania, including Greensburg, Pittsburgh, Delmont, Monroeville, Murrysville, Latrobe, Irwin, Uniontown, Connellsville, Indiana, Somerset, and other towns located in Westmoreland County, Allegheny County, Fayette County, Indiana County, and Somerset County.
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IRS CIRCULAR 230 DISCLOSURE:
To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.